Installation of energy saving materials
Tax Question
My client installs solar panels. They have installed integrated solar panels into a domestic property. The panels are integrated into the roof of the property. The entirety of the existing roof of the property had to be replaced in the process of installing the new panels. Is this eligible for zero rating as installation of energy saving materials?
Tax Answer
No this is not eligible for zero rating. In this instance the panels are integrated into the roof of the property and cannot be installed without replacing the roof. This supply is therefore a new roof which consists of normal roofing materials and integrated solar panels. The dominant function of this supply is to provide a roof for the property but with the added benefit of solar panels. In this case the supply of the solar panels along with other goods and services which took the form of a new roof when supplied together. The supply of a new roof to an existing property is a standard rated supply.
In instances where energy saving materials or heating equipment are installed alongside other works it is necessary to consider whether the goods and services when supplied separately have equal importance but when supplied together take the form of something else. HMRC’s VAT notice 708/6 s2.7.3 provides some further examples where this would be the case.
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